Nvidia Says Q4 Crypto Miner Demand Was as Weak as Expected

Nvidia had more disappointing news for investors Monday, but for once the cryptocurrency mining slump was not directly to blame.

In updated guidance released Monday, the graphics card manufacturer warned it now expects to report only $2.2 billion of revenue for its fiscal 2019 fourth quarter, which ends Jan. 31, down from a previous estimate of $2.7 billion.

The earlier forecast had already factored in a drop in demand for graphics processing units (GPUs) used in crypto mining, Nvidia said, and sales of the extra graphics cards have kept pace with those expectations.

“Exiting Q3, we estimated channel inventory would be largely depleted within one to two quarters, or between February and April,” CEO Jensen Huang wrote in a letter to shareholders. “Our view of that today remains unchanged.”

The problem is that economic woes and uncertainty, particularly in China, hurt demand for GPUs among Nvidia’s other customers – gamers and data centers.

The company has been warning of a “substantial decline” in revenue from cryptocurrency miners for some time now.

Nvidia anticipated bringing in $100 million during the second quarter of fiscal 2019, but only saw $18 million.

“Whereas we had previously anticipated cryptocurrency to be meaningful for the year, we are now projecting no contributions going forward,” chief financial officer Colette Kress said during an earnings call last summer.

Its competitor, AMD, had likewise cautioned that a drop in demand for GPUs by miners would “materially” impact its GPU business.